Investments in real estate in Italy, see off 2023 and welcome 2024
Investment in real estate is a key basis for protecting and increasing capital in the future. The main aspect of creating a successful investment portfolio is always the right choice of an expert company to build an investment strategy.
New level international real estate operator VelesClub Int. has been successfully developing since 2015, occupying a leading position in the international real estate sector; as of January 2024, our services can be used by investors and property buyers in more than 22 countries around the world.
Let's get acquainted with the Italian economy with experts:
“The Italian economy is a post-industrial mixed model that continues to actively develop. Italy ranks 4th in the ranking of economically developed EU countries and 8th in the world at the beginning of 2024. The state itself positions itself as an industrial economy in the north and an agricultural sector in the south. GDP growth in 2023 was 0.8-1% according to various sources, which is lower than the government forecast and, with a population of over 61 million people, is about $30k per person. The insufficiently high growth rates of the Italian economy are associated with a decrease in added value in forestry, agriculture, and fisheries, growth in the industrial sector, but stagnation in the service sector in 2022-2023.” - the head of analytics and investment unit VelesClub Int provides statistical data. Ksenia Shamitko.
The share of Italian state capital in the industrial sector is very significant, therefore the sectoral structure of the Italian economy is a state-monopoly form of management.
In Italy, the Institute of Industrial Reconstruction operates at the state level, a holding company that includes more than 150 enterprises with government participation. The holding is one of the ten most powerful industrial economic groups in the world.
The state holding includes:
Real estate market in Italy, facts, prices and trends, let's understand:
Despite the uncertainty of the geopolitical situation, high inflation and instability in household incomes, real estate prices in Italy are stable and are in no hurry to decline, as we could see during the pandemic.
For example, if the average price of real estate in 2024 increases by 1 percent compared to 3.1% in 2022 and 1.5% in 2023, then, taking into account inflation, we will record a decrease. A similar situation is expected in 2024–2025, when growth will be 0.5-1% and inflation will be at 2.5% per year.
In the Italian real estate market, we observe low profitability of offers, which is due to rising prices for building materials, which shows us: “real estate prices do not fully reflect inflation in the country.”
“At the end of 2023, the average property price in Italy for private houses ranged from 21k € in the south of the country and reaches 500k € in Tuscany and Lake Como. The average price of m2 in apartments in Rome varies from 4-7k €. Rome and Milan are seeing an influx of migrants from the southwest of the country to the north, which is contributing to an increase in demand and prices in the real estate market. For example: in Rome the average price of a house of 200 m2 is 603k €, and in Florence and Venice a house of the same size will cost 890k €, and in Naples 505k €. The most affordable real estate prices remain in the southern regions of the country (1.3-1.7k € per m2),” the Development Director of VelesClub Int cites statistics. Natalya Bazhenova.
Investment property management in Italy, let's understand:
On the blog VelesClub Int. We previously published an article about record performance in the rental real estate market in Italy: By the end of the third quarter, Italy unexpectedly became the champion of the European real estate market with an impressive average rental yield of 8.8%!!! In some regions, rental yield reaches 14.8%!!! Read the full expert report in our blog.
Long-term rentals are often chosen by investors as a stable, understandable tool for generating income. However, the profitability may be significantly less than short-term rentals; there are additional issues of maintaining the condition of the property and formalizing relations with tenants.
Short-term rentals promise higher income and return on investment for the investor, especially for tourist areas or cities that host seasonal events. However, this method requires more active management of the investment property (promotion, booking, cleaning and service, contractual basis).
Both require good knowledge of the local market, effective property management, a targeted marketing strategy to extract maximum profit from the rental property and the correct execution of all associated paperwork.
Any real estate investment requires evaluation and balance, and complete trust in market experts. A team of experienced managers at VelesClub Int. I am always ready to answer all your questions and accompany you at all stages of the transaction and subsequent reinvestment and diversification of your investment portfolio.
